The exodus of EU drivers is by no means the most significant factor in the current driver shortage, and the industry must concentrate on attracting back British drivers from the ranks of those who have left the profession but not the country.
That’s the message from the Driver Require Think Tank, which also says the industry should welcome wage inflation as making driving more attractive both to returners and potential new recruits. Shorter hours, better roadside facilities and more flexible approaches to working will also be required.
The Latest Analysis of the UK’s HGV Driver Shortage Crisis from the Driver Require Think Tank follows publication of its report: A Perfect Storm of Elevated Demand and Reduced Supply (Transport Operator 99), which correctly predicted a severe shortfall of truck drivers in the UK starting in the summer. The new analysis draws on data collected before, during and after the Covid crisis, using Office of National Statistics data released in August to identify the true causes of the current shortfalls in driver recruitment and retention. Many of its findings will make uncomfortable reading for industry groups and some employers, but others will applaud its honesty in high-lighting problems and possible solutions.
It identifies two seemingly separate workforces in the driver pool pre-Covid: a settled cohort of drivers aged over 45 working towards retirement, and a highly dynamic group aged under 45 which was driving change in the sector.
In the decade before Covid, it found a relatively constant number of drivers in the workforce: increasing by only seven per cent from 280,000 in 2010 to 300,000 by the end of 2019. During the same time, the number of EU drivers working in the UK increased from 10,000 to 40,000 individuals.
Beneath this apparent stability, the real movement was in newly-trained drivers. From 2010 to 2014 an average of 25,000 HGV licence test acquisitions per year was recorded. This increased in the second half of the decade to an annual average of 42,000 a year, and across the decade an average of 62 per cent of these were ‘new passes’ acquiring a Cat C licence.
At the same time, older drivers were retiring from the profession: Driver Require estimates these numbers to be about 7,500 a year for the first half of the decade and 8,600 a year for the second half. It then calculates that the first half of the decade saw some 8,000 drivers a year abandoning the profession before retirement, rising to a staggering 17,000 a year in the second half.
During the entire decade, 135,000 qualified drivers gave up driving, an estimated 60 per cent of which did not keep up their Driver CPC qualification, and can be considered to have abandoned the industry.
Many of these losses were in the cohort aged under 45. Driver Require calculates that 15,000 gave up truck driving in 2010-14, rising to 90,000 in 2015-19. Most drivers leaving the profession decide to do so before they reach the age of 45, and their first medical. The number of working drivers under 45 declined from 115,000 in 2010 to 100,000 at the start of 2020. Driver Require calculates that, once the EU drivers and drivers reaching the age of 45 and continuing in the profession are taken into account, the industry lost 140,000 new passes as drivers.
As of mid-2020, the report asserts, almost half of LGV licence holders under the age of 45 have left the industry altogether, 32 per cent have retained their licence and Driver CPC qualification but are not working primarily as drivers, and just 19 per cent (94,000) are still working as truck drivers. It cautions that these calculated rates of change are, if anything, conservative.
The result of this failure to retain is that there are 234,000 LGV licence-holders under the age of 45 who are not driving trucks for commercial purposes. Other factors frequently cited by the industry as causes of the driver shortage are, in fact, insignificant, and could easily be absorbed were more drivers under 45 retained. At their peak, EU drivers only made up 12 per cent of the UK driving force, and the rate at which old drivers retired from the industry was also insignificant when compared to the numbers of younger drivers lost.
The report concludes that the pre-Covid decade saw the industry actually harmed by an over-supply of drivers. With more surplus drivers than vacancies, wages were driven down, working conditions worsened and roadside facilities declined, all forcing qualified drivers out of the industry.
To a certain extent this was masked by the influx of EU drivers, but the report asserts that their primary role was to damp out short-term fluctuations in demand for drivers.
In the second half of 2020, this situation changed. Driver numbers fell by 25,000, but for the first time most of the loss was of drivers over 45. Covid (rather more than Brexit) saw 8,500 EU drivers leave the country, making up most of the decline in numbers for the younger cohort. But 60 per cent of the loss was of drivers over 45.
The situation continued into the first quarter of this year. A further 9,000 EU nationals left, but there was a 15,000 increase in the younger age bracket. Most significantly, 40,000 drivers over 45 were lost to the industry, seeing a total drop of 25,000 drivers.
Driver Require postulates that older drivers were more likely to have self-isolated or been furloughed than younger colleagues, and may have decided after taking a break from driving that they did not want to return.
In the second quarter of 2021, the trends changed again. There was a 20,000 drop in the workforce: but this time almost entirely from the under-45s; while there was an increase in 5,000 of the number of EU nationals working as drivers. Driver Require says this is unexpected given anecdotal evidence from the industry that the IR35 reforms would drive more EU nationals out of the industry.
Driver Hire concludes though that the overall impact of Covid was to drive the older (and hitherto most loyal) drivers out of the industry. Of the total drop of 70,000 drivers from March 2020 to the end of June 2021, only 12,500 were EU nationals. But 55,000 were drivers aged over 45.
The report reminds us that demand for drivers during the 15-month pandemic period fell, and some left the industry as a consequence. When restrictions were lifted in the second quarter of 2021, demand for drivers outpaced supply, resulting in the current driver shortage. Only 18 per cent of the workforce reduction can be attributed to EU drivers leaving the country, and the report postulates that Covid and IR35 were more significant in this than Brexit.
Most problematic, and unpredicted, was the loss of older drivers. The first quarter of 2021 saw 40,000 leave, and the number who left over the entire pandemic period amounted to 55,000. It is clear that many had developed a taste for life off the road.
The report concludes that wages must rise, although there will inevitably be resistance from large retailers to the consequent rates rises imposed by hauliers. Negotiating collective agreements and new haulage rates would resolve the issue faster, but free market dynamics will ultimately boost wages, it says.
In the meantime, effort would be needed to retain new passes in the industry and win back drivers who have already left. The report cites surveys which suggest that reduced hours and later start times would help with this, in addition to increased wages.
An emerging trend is a greater differential between the hourly rate for ‘standard’ hours and extra payments for overtime and antisocial hours. The report suggests that this is a good thing, allowing those drivers who seek a work/ life balance back into the industry while still rewarding the ‘money-chasers’ seeking to maximise earnings.
The full report can be downloaded at the Driver Require website.